Major corporations continue to pile up profits

Wednesday

The major corporations that drive the Rock River Valley economy continue to be very profitable, will that finally mean major jobs gains?

Walgreens Co. yesterday reported a slight gain in revenue in its second fiscal quarter and a small decline in its profits.

The Deerfield-based company's flat revenues and declining profits was an anomaly in the latest round of earnings reports, which were based on business activity in the final three months of 2011. For the eighth time in the past nine quarters, more than 60 percent of the companies on the Register Star's Star 60 stock index released profit levels that were better year over year.

Several of the more significant companies to the local economy led the way:

* Woodward Inc., which employs more than 1,400 in Loves Park, reported a nearly 12 percent increase in revnue and $6 million more in profit in January.

* United Technologies, which employs nearly 3,000 locally at Hamilton Sundstrand in Rockford and Taylor Co. in Rockton, saw its earnings on $15 billion in revenue increase by more than $169 million.

* Exelon Corp., which employs nearly 1,000 at its CommonwealthEdison service center in Rockford and nuclear generating stations in Byron, had nearly 16 percent more in profits on $4.25 billion in revenue.

* Kraft Foods, which has about 900 workers at its gum plant in Loves Park, reported a 53.7 percent increase in earnings on 6.6 percent more revenue.

Still, even though companies have been piling up profits for more than two years now, 2011 ended with a jobless rate of 12.3 percent in Boone and Winnebago counties.

John Lewis, an economist formerly for Northern Illinois University who now runs a consulting firm in Sycamore, said the sustained profitability will help companies continue to hire, but several hurdles remain before that pace increases signficantly.

"Oil prices are a concern. That is a primary cost in transporation and production," Lewis said. "There are still a lot of unknowns with the European economy. I don't see major capital investments by companies this year."

The hiring figures will be better in the first quarter of 2012. Chrysler Group LLC is adding 1,800 to its assembly plant in Belvidere, boosting payroll to a record 4,500. That in itself will drive the unemployment near 10 percent. Several Chrysler suppliers are boosting payrolls as well.

"For a long time the national economy has been having a more robust recovery than we've had here," Lewis said. "Now, we're going to catch up with the rest of the country. There are still several industries though where the recovery is very gradual."